Hi all,
Just wondering what people pay each year for an accountant.
Me: company, only 1 director and no employees. Service based, 5 clients who are invoiced monthly. No sales, no stock. I do everything through XERO and upload all receipts.
Got the bill for last financial year: $2750. I see the accountant for 30 minutes once per year to sign some paperwork.
Thanks.
About right
equates to about 10 hours work, seems reasonable if they are a CA/CPA, there are a lot of checks/reconciliations the accountant would do that you dont see.
Accountant should charge you about $1,250 for the tax return if you do everything in Xero.
Tip: Ask your accountant to invoice you in your personal name as the chances are that your personal tax rate is higher than the company's. (Ignore this if your company is registered for GST and you aren't)
Source: I am a tax agent.
Extra tip: Your accountant should be communicating with you every 3-6 months even if its a 20 minute chat to see if you have any questions, or are wondering about purchasing new things etc.
In May for example, we look at our clients profit and loss and see what their tax situation is looking for this financial year. You may benefit from purchasing things prior to 30 June for example, or make super contributions, or pay a higher salary/dividend etc.
Just my thoughts :)
Just my thoughts :)
Sounds like a bigballerbrand plug..
Tip: Ask your accountant to invoice you in your personal name as the chances are that your personal tax rate is higher than the company's. (Ignore this if your company is registered for GST and you aren't)
Isn't this a bit dodgy? One can only claim a deduction when it is for your own income tax return. Fees for preparing income tax returns for yourself or associated persons (such as a spouse) need to be apportioned if you have a single invoice for these costs. Why not take it to the next level and ask the accountant to add an extra 0 in the invoice?
Must say I've never seen the ATO reviewing such apportionment in my whole professional life.
Never say never :) In case of an audit, I am sure a $2,750 bill will attract attention especially if it is a simple tax return. Anyway link provided above is from ATO.
They are clamping down on tax evasion/avoidance loopholes. Years ago it's quite common to see employees using ABN but guidelines on independent contractor have gotten much tighter.
If you're the public officer of the company you can claim in your own name so long as the invoice is made out to you. So not dodgy at all :)
It is dodgy :) Public officer or no public officer. Service is to the company (separate legal entity) and not the individual. One can only claim a deduction for fees in preparing one's income tax return, not a company's or somebody else's (read my above link on apportioning tax fee).
It's like asking your employer to change the name on your payslip to your partner's just to avoid paying income tax on it.
@trex: Not really,
Keep in mind that a public officer can be personally held responsible for the companies actions hence why the provision exists. If a public officer wasn't personally responsible for the companies actions then I would tend to agree with you :)
@bemybubble: What provisions do you mean?
a public officer can be personally held responsible for the companies actions
Can be, not will be. Circumstances where a public officer can be liable is when they break laws. They are not personally liable otherwise eg if company goes bust, creditors can't go after the directors (unless they gave a guarantee in their personal capacity, acted fraudulently/breaking laws etc).
Do you also mean that a public officer can treat the company's funds as his own?
That seems expensive
Might include financials and lots of tidying up.
Only going by what op has written. If that's what they did, then I think its way too expensive. If there are tidying up, then there'd be back and forth emails as well as potentially more meetings.
Until the op replies with more details it's hard to say whether it's worth this much. Some of my clients have an unrealistic expectation of having multiple phone calls even if we've only charged the absolute minimum. So the following year, we up the fee.
$0 if you just leanrt how to do it yourself. Read some tax books and leanrt how they fill up those forms last year, it should not be that hard.
And it's the same people crawling back to their accountants if they get it wrong and the ATO is on their backs.
$2750 including or excluding GST? What else is there on the letter of engagement? Financials? Does the accountant keep your corporate register? Do you call the accountant during the year? Is the personal return included? Sounds like you're earning PSI. The return may take a little longer to do.
Just the 30 minute session is already $300 + GST or more at partner rates.
Mine is about the same ($2.3k + GST) — everything in Xero, no stock, but a few employees. The fee includes preparation of company's annual accounts & tax return, but also includes detail review & adjustment of Xero files, to ensure I have not done anything dodgy (accidentally or deliberately).
I have a Permanent Part time job, as well as working as a Part time contractor. I supply all the figures in an excel summary (purchases, deductions, travel allowance etc), and they charge about $300 up front.
$2-$3k is fair if they are advising and preparing minutes, financials etc.
I think you’ve been taken for a ride…
Your accountant would have told you the $2750 is tax deductible (it is)…